3.3 Token Distribution, Community Ownership

In the ORC State Trie, the Liquidity Mining Account (LMA) will be publicly noted. The LMA will distribute API tokens once per week, similar to Synthetix’s model. The Account is currently controlled via a nine-person multi-sig, overseen by the APSs Council, although the Council will eventually be removed and replace it with the APIS Governance Contract, such that API token holders can vote each week whether the supply is increased or not. This allows API holders to prevent future inflation, should they believe it is no longer needed, as market-blind liquidity mining, as most projects have implemented [28], has proven to be less optimal than market-aware liquidity mining, as exemplified by [29].
As referenced prior, API Liquidity Mining is achieved through usage, not the liquidity of the APIS platform itself. While many protocols have opted to incentivize the trading and lending of their token, the APIS network is best suited incentivizing API queries and API calls, rewarding those who use the protocol for its intended purpose, paying and receiving fees for the service that the network provides (demand side and supply side). Third-party client developers and APIS Nodes & Gateways will receive a monthly payout according the following function:
where F is fees paid by each third-party developer to each Node or Gateway, TF is the total amount of fees paid on the network, and T is the amount of tokens allocated to the program by the network for that month. We have considered taking the sum of the square root of fees paid to disincentive wash-trading and instead to encourage the usage by third-party developers of a wide variety of Gateways and Nodes, incentivizing maximal decentralization of the network. However, we will leave this decision to a community vote. T is currently a variable number of API per month, following an S-Curve that aligns with a two-year adoption cycle, and will be released online shortly, but may be altered based on the APIS community’s vote at large once the governance module passes a proposal removing the power from the Council and placing it to the APIS community via an APiiP.